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Tax uncertainty over insolvency deals likely to go The government may consider resolving two of the biggest tax roadblocks looming over a successful conclusion of the insolvency process in the upcoming Budget, two people close to the development said. The government may allow carrying forward of losses for eight years for buyers of companies in the insolvency process. This is not allowed under the current tax laws and buyers have been asking for such a relief. it may also address industry fears of the income tax department challenging the valuations after the conclusion of deals. "The government allowed carrying forward of losses for eight years for the startups last year. Similar exception is being considered for deals happening in insolvency," a person close to the development said. Industry trackers said the tax outgo could be higher if the buyer of an insolvent company is unable to set off losses or carry it forward on the balance sheet. "Section 79 of the I-T Act specif…

Single GST registration for airlines, banks on the anvil The government is considering a nationwide single GST registration process for the aviation, banking and insurance sectors, people in the know of the matter said. A single registration will potentially solve a majority of the compliance problems that services companies have been complaining about. They now have to register themselves and file GST returns in every state or union territory (UT) they operate in. But the change will require the approval of the GST Council, the top decision-making body under the new tax system, where states are expected to oppose it fearing revenue loss as they have done when the proposal had come up before, tax experts said. But the change will require the approval of the GST Council, the top decision-making body under the new tax system, where states are expected to oppose it fearing revenue loss as they have done when the proposal had come up before, tax experts said. While goods-producing industries…

Need to stabilise GST implementation to facilitate easier compliance: Economic Survey India needs to work towards stabilising the goods and services tax, removing uncertainties for sectors such as exports, the Economic Survey said while pitching for a review of tax embedding caused by the exclusion of some products from the ambit of the new levy. "The government will also need to stabilise GST implementation to remove uncertainty for exporters, facilitate easier compliance, and expand the tax base," the Economic Survey 2017-18 said. The rollout of the new tax was marred by hiccups related to compliance, prompting the GST Council to expeditiously revisit provisions such as rates on household goods and those for small-scale sectors. It termed GST revenue collections as 'surprisingly robust' given that these are early days of a disruptive change. "revenue collection under the GST is doing well, surprisingly so, for such a transformational reform," it said. Revenu…

Taxpayer base up 50% since GST Bolstered by sharp growth in the tax base, goods and services tax (GST) revenue mop-up has been ‘surprisingly robust’ despite ‘teething difficulties’, said the Economic Survey 2017-18. The indirect tax base grew 50 per cent since the GST roll-out, led by a large increase in registrations, especially by small enterprises. The demonetisation of high-value currency notes in November 2016 resulted in widening of taxpayers’ base, the Survey said. As of December 2017, there were 9.8 million unique GST registrants, slightly more than indirect tax registrants under the earlier system. Although not comparable, GST has increased the number of unique indirect taxpayers by more than 50 per cent, a substantial 3.4 million. “The two numbers are not comparable. Registrants in the old system were not unique, since many taxpayers were registered under several taxes,” the Survey said. Maharashtra, Uttar Pradesh, Tamil Nadu and Gujarat have the largest number of GST registrant…

Low success rate in resolving disputes Tax departments have had a success rate below 30 per cent in dispute resolution, Economic Survey 2017-18 pointed out A whopping 66 per cent of pending cases accounted for only 1.8 per cent of the value at stake and a minuscule 0.2 per cent of cases accounted for 56 per cent of value at stake, showing an adversarial tax regime in the country. The government had in 2016-17 modified the annual appraisal proforma of income tax officials, giving weight to their assessments orders being upheld on appeal. The Survey said collections of direct taxes by states and local governments were significantly lower than those of their counterparts in other federal countries such as Brazil or Germany.Meanwhile, there has been an addition of about 1.8 million individual income tax filers since demonetisation in November 2016, according to the Survey. Measures such as GST and demonetisation have led to an increase in personal income tax collections, substantially from ab…

Sebi limits trading in security receipts to qualified buyers Sebi’s move aimed at allowing only informed investors to trade in the securities A private placement, rather than a public issue, is the markets regulator’s favoured route to start trading in securities receipts issued by asset reconstruction companies (ARCs).Only certain “qualified buyers” will be permitted to trade in them, and the minimum lot size will be Rs10 lakh. The intention is to allow only informed investors to trade in these securities. A committee set up by the Securities and Exchange Board of India (Sebi) has made these recommendations, and the regulator’s board meeting on 28 December approved them, minutes of the meeting published on the Sebi website on Monday showed.“The offer of Security Receipts (SRs), which are proposed to be listed, may be allowed only to Qualified Buyers through private placement,” the minutes read. Initially, security receipts—issued by ARCs to banks in exchange for some of their bad loans—w…

Labour Ministry looks to add self-employed to job data Employment numbers could increase significantly if a labour ministry proposal to include self-employed people under the Pradhan Mantri Mudra Yojana (PMMY) in the data is implemented. That would give the government's job-creation credentials a boost ahead of the 2019 general election. This proposal comes as a spat has been brewing over a recent report that said 5.5 million people will be added to the Employees' Provident Fund Organisation (EPFO) network in the current fiscal, reflecting employment growth. Critics have said EPFO enrollment doesn't necessarily mean job creation. The PMMY initiative is separate from this and will be the first attempt to capture the number of self-employed people in the country's job data. It is expected to add more than 50 million people to India's existing workforce of nearly 500 million, a senior government official told ET on the condition of anonymity. Out of India's total work…